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Contrct Labour & Workmen Compensation Act

Contrct Labour & Workmen Compensation Act

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Published by Atish Kumar

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Published by: Atish Kumar on Dec 22, 2012
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E5-E6 Telecom Rev date: 18-03-11
©BSNL, India For Internal Circulation Only
Page: 1
Chapter -15
Shobhit Kumar, DGM (BS-C), 9412739212 (M)E-mail ID: shobhitkr@sify.com
E5-E6 Telecom Rev date: 18-03-11
©BSNL, India For Internal Circulation Only
Page: 2
Contract Labour (Regulation & Abolition) Act
 An Overview
Contract Labour (Regulation & Abolition) Act, 1970 (Amended in 2004)1.0
The Act aims at regulating employment of contract labour so as to place it at par withworking conditions. The Act empowers the Govt. to prohibit employment of contractlabour in any process, operation or other work in
any establishment if the workingconditions and benefits provided to them are discriminatory.
2.0 Scope & Coverage
Sec. 1:
The Act extends to the whole of India. It applied to:-(a)
in which 20 or more workmen are employed or wereemployed on any day of the preceding 12 months as contract labour, and(b)
who employs or who employed on any day of the preceding 12months, 20 or more workmen.(c)
The Act, however, does not apply to any establishment working casually orintermittently. Work performed in an establishment
shall not be deemed to be of an intermittent nature
If it was performed for more than
120 days
in the preceding
12 months
, or(ii)
 If it is of seasonal character
and is performed for
 more than 60 days
in ayear.
3.0 Definitions:-3.1 Workman
:- A workman is said to be employed as CONTRACT LABOUR in orin connection with the works of an establishment when he is hired for the work byor through a contractor with or without the knowledge of principle employer.
[Sec. 2 (b)].3.2 Contractor
: - Contractor (including sub-contractor) means a person whoundertakes to produce a given result for an establishment through contract labouror who supplies contract labour for any work in an establishment. Persons whomerely supply goods or articles of manufacture [
Sec. 2(1) (c)]
for anestablishment are not contractor.The contractor is employed to produce the given result for the benefit of the Principal Employer in the fulfillment of the undertaking given to him by thecontractor. [M/S Gammon India Ltd. Etc. Vs. U.O.I. & Ors. (1974)1 SCC 596].
Workman hired through a contractor without a valid license and being paid
E5-E6 Telecom Rev date: 18-03-11
©BSNL, India For Internal Circulation Only
Page: 3
by the management through that contractor, are workmen employed by theestablishment and not contract labour.
Workman engaged through a contractor in excess of the maximum numberpermitted under the license are not contract labour [Workman vs. Best &Crompton Engg. Ltd. (1985)2 LLN 169 {Mad) (D.B.) : (1985) 1 LLJ 492].
3.3 Establishment
:- Establishment, for this purpose, means any place where anyindustry, business trade, manufacture or occupation is carried on or any office of the Govt. or a local authority
[Sec. 2(1) (e)].4.0 Employees Entitled:
The Act covers every workmen emplo
yed in or in connection with any of theestablishment, by or through a contractor, with or without the knowledge of theprincipal employer
[Sec. 2(1) (b)]
but excludes:(i)
persons employed in managerial or administrative capacity,(ii)
persons employed as supervisors and receiving wages exceeding
Rs.500/-per Mensem (Month),
“out – 
workers” to whom materials are given for manufacturing or 
processing at his own premises
[Sec. 2(1) (i)].
5.0 Administrative Authority:
The act is administered by the Central and the State Governments in theirrespective jurisdiction. The central/state Govts. have set up advisoryBoards constituted by representatives of industry, contractor, workers andgovernment nominees
[Secs 2(1) (a), 3 and 4].
The Govt. also appoints registration offices, Licensing officer andinspectors for carrying out the provisions of the Act
[Secs. 6, 11 and 28].
 The Central and the State govts. Shall make their rules for enforcement of the Act
[Sec. 35].
6.0 Prohibition on Employment of Contract Labour:
The appropriate Govt. can
prohibit employment of contract labour
in anyprocess, operation or other work in any establishment after considering theconditions of work and benefits provided for the contract labour in thatestablishment and other relevant factors
[Sec. 10].
Employment of 
contract labour may not be permitted
for any process operationand other work if:(a)
It is incidental to , or
necessary for the industry,
trade business, manufacture or
occupation that is carried on in the establishment;

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